Tuesday, March 29, 2011

Iraq Still Has Problems With Its Oil Meters

In 2007, Iraq began installing meters on its petroleum industry. By 2009, the Oil Ministry said that it would be finished by 2011 at the earliest. The latest quarterly report by the Special Inspector General for Iraq Reconstruction, noted that the country is still having problems with this issue.

The meters are supposed to be installed not only at the state-run oil companies, but at factories that produce refined products as well. Baghdad told the United Nations that as of September 30, 2010, 158 out of 390 had been placed at the South, Maysan, and North Oil Companies, which would put the government ahead of schedule. 1,533 out of 4,508 had been installed at the various refineries, gas, and oil pipeline businesses, which was behind the set timeline. In total, Iraq wants 4,898 devices up and running. Around 51% of those are currently in place. That was up from 33% in December 31, 2008.

Through the years various organizations have found problems with Iraq’s plans. One group found that the government was not using all the meters installed. Another noted that Iraq was using three different types of devices, which were not integrated, that they were not always calibrated, and that some had low reliability. Corruption at the Oil Ministry has also made false documentation the norm, which means that the numbers recorded from the meters could still be changed.
Click on image for larger view (Special Inspector General for Iraq Reconstruction)
Meters are necessary in Iraq because of oil smuggling. Then deputy Oil Minister, and now current Oil Minister, Abdul Karim Luaibi told the Special Inspector General for Iraq Reconstruction in November 2010 that smuggling was no longer an issue. He claimed that the U.S. military had not found any suspicious trucks delivering illegal oil from Iraq. That was an odd assertion as American forces are on the way out, and do not have as much presence in the country as before to collect such information. General Hamid Ibrahim, the head of the Oil Protection Force, contradicted Luaibi in March 2011. Ibrahim told Reuters that there were still gangs breaking into pipelines and smuggling oil. He went on to say that around 450 oil tankers had been seized for trying to ship petroleum illegally, but didn’t give a time period for when that had been done. The Oil Minister also claimed that he didn’t know about smuggling from Kurdistan, but it is going on despite official denials from the regional government there. Baghdad doesn’t make an issue out of it, as the two sides appear to have a tacit agreement on the matter. It couldn’t do anything about it either as it has no forces on the border there. In fact, devices probably are not even going to be placed in Kurdistan, as the Oil Ministry has no role in the industry there.
Tankers captured smuggling oil in Iraq (Reuters)
Without meters installed, Iraq can never be sure how much oil and refined products it is producing, and where they are going. The country has been working on the issue for the last four years, but progress has been slow. It is still behind schedule in fact. Not only that, but when all of them are in place, there’s no telling whether they will all be used, whether the figures collected by the Oil Ministry will be accurate, and there will still be no oversight in Kurdistan. The devices are a necessary step to monitor Iraq’s most important resource, and can be a new tool in the fight against corruption and smuggling, but it will not end all of the country’s problems either.


Davies, Rhodri, “Tanker trucks line up on North Iraq-Iran border,” Al Jazeera Blogs, 2/4/11

Lando, Ben, “IAMB: Iraq lags in oil metering,” Iraq Oil Report, 4/26/09

Mohammed, Muhanad, “Iraq sees more attacks on oil sector, needs police,” Reuters, 3/13/11

Special Inspector General for Iraq Reconstruction, "Quarterly Report and Semiannual Report to the United States Congress,” 1/30/11

Williams, Phil, “Criminals, Militias, And Insurgents: Organized Crime In Iraq,” Strategic Studies Institute, June 2009

World Bank, “Interim Strategy Note For The Republic of Iraq For The Period Mid FY09-FY11,” 2/10/09

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